Too hot for now: commissions for sales reps

After scandal, fundraisers debate ethics

By Karen Everhart

Having witnessed the damaging one-round knockout of NPR fundraiser Ron Schiller in March, public radio’s development pros are working to adapt the lessons they’ve learned about ethics and prudence into a set of best-practices guidelines for use throughout the field.

But they’re already tiptoeing around a clear discrepancy between the major ethical code of professional fundraisers and a common practice in public broadcasting — paid commissions on underwriting sales.

DEI, the national agency for pubradio fundraising that convenes its annual Public Media Development and Marketing Conference in Pittsburgh later this week, has assembled a group to draft ethical standards for fundraising in nonprofit public media.

DEI is leading the re-evaluation as part of its CPB-backed Leadership for Philanthropy project, which aims to help stations improve their major-gift fundraising.

The main starting point for DEI’s advisory council is the Code of Ethical Principles and Standards of the Association of Fundraising Professionals, which prohibits commission-based compensation for nonprofit fundraisers. The council has tabled that dispute while digging into less difficult issues.

“I’m trying to put the elephant in the middle of the room in the closet,” said DEI President Doug Eichten. “I’m insisting that that comes later in our work. Otherwise we’ll be stuck there and never get beyond it.”

The DEI review coincides with and complements the work of a separate steering committee of station leaders that’s updating a statement of editorial principles to guide public television and radio (Current, April 4). Walt Gillette, a member of the DEI advisory council and development director at WAMU in Washington, D.C., said it’s important to take a deeper look at fundraising ethics while public radio stations work to expand their newsgathering. Fundraisers need guidance about how to secure funding “without jeopardizing the integrity of our news content or steering the content,” he said.

“We’re talking about preserving the public trust in the broadcast service and in the ways that we deal with our prospects and donors one on one,” Gillette said. “To preserve the public trust, we need to be able to share that code and have professionals who abide by it.” Gillette is an AFP member with advanced certification, one of a handful raising funds for public broadcasting.

Recovering from the sting

All of this navel-gazing is meant to help fundraisers keep secure footing in the shifting media landscape, according to Eichten and advisory-council participants.

A secretly recorded sting video that led to the ouster of NPR’s top fundraiser, released in March by right-wing activist James O’Keefe, highlighted the need for a close look at the field’s ethical standards, Eichten said. Before Ron Schiller’s takedown, it was difficult to generate much interest in the topic.

“It’s hard to get people’s attention,” Eichten said. “Everyone feels that they’re ethical people, but life’s more complicated than that.” The NPR fundraiser’s predicament was just an extreme version of problems that development pros often encounter.

Schiller, then NPR development chief, and his deputy Betsy Liley met in February with two right-wing activists posing as wealthy Muslims interested in making a $5 million gift to NPR. In hidden-camera footage of their lunch meeting, Schiller made disparaging remarks about conservative Republicans that O’Keefe presented as evidence of NPR journalists’ liberal bias.

By sharing his personal political opinions while he was representing NPR, the network vice president violated the first rule of the AFP code: “Members shall not engage in activities that harm the members’ organizations, clients or profession.”

Liley, who talked with one of the donors in follow-up phone calls, was recorded making statements that misrepresented NPR’s policy on anonymous donations.

In Fairbanks, Gordon led her team through the sting video, analyzing the gaffes.

“When things like this happen, it helps to solidify in some people’s minds that our field is not professional,” said Gretchen Gordon, development director at KUAC-TV/FM in Fairbanks, Alaska. The video sting undermined the credibility of NPR and the philanthropic fundraising profession as a whole, she said.

The recordings released by O’Keefe were heavily edited to inflict maximum political damage on NPR and distributed with viral velocity over the Internet. Their release prompted both Schiller and then-President Vivian Schiller (no relation) to abruptly leave NPR.

Liley was placed on administrative leave but has been reinstated to NPR’s development team, according to an NPR spokeswoman.

Meanwhile, public broadcasting’s fundraising execs have been assessing the damage to their institutions, donor relationships and profession — and looking for ways to repair it.

Gordon, an AFP member and certified fundraising trainer who is serving on the advisory council, treats the episode as a teachable moment. She led the KUAC staff through a dissection of the sting video, compared with the AFP code, which she described as an excellent tool for guiding donor relationships.

Station fundraisers were already feeling the need to revisit ethical questions for another reason. As more stations begin seeking major gifts — $1,000 and up —more general managers and board members have become involved in cultivating donors, Eichten said.  It’s important that everyone works from a shared set of guidelines, he said.

In assessing the policies and decisions that led to the embarrassing chain of events in NPR’s executive offices, one thing became clear to Eichten: “Part of what happened to Vivian [Schiller] is she didn’t know what was going on underneath her.” To head off future fundraising calamities, pubcasters must work out a “common understanding of what we do and don’t do, and then decide whether they’re buying into it.”

Station staffs must also take board members through this process, Eichten said. “They’re involved in fundraising as well, and those people are just as likely — if not more so — to make mistakes.”

Out of commission?

Two of their traditional fundraising methods — on-air pledging and underwriting sales — have long separated public broadcasters from the mainstream of the nonprofit world, according to Alice Ferris of Goalbusters, a fundraising consultancy based in Arizona.

But as more stations look to cultivate major donors and earn larger gifts, it’s increasingly important that they devise a set of ethical guidelines shared with other fundraisers.

Whether stations should pay commissions on underwriting sales is the biggest issue to resolve in bridging the differences. Although public stations’ fundraising policies vary widely, many pay commissions to their underwriting salespeople, according to Gillette, Ferris and Gordon.

Some salespeople came to public broadcasting from commercial stations where commissions are a standard practice; the “donors” of underwriting generally are businesses that regard underwriting as a marketing expense more than philanthropy.

DEI doesn’t oppose commissions or bonuses for underwriting reps, Eichten said. “The feeling is that there is a difference between a sponsorship sale and a philanthropic transaction,” said Eichten, “but not everybody buys that.”

AFP considers the practice antithetical to its principles for preserving public trust and serving donors’ interests.  Some stations also pay commissions to grant writers whose proposals succeed in securing funds, according to Ferris and Gordon.

“There are many public broadcasting organizations whose general managers would be opposed to rearranging commission-based compensation,” said Gordon. “They want to keep salespeople hungry and believe that if they’re paid on salary they’re not hungry.”

That philosophy is outside AFP’s “culture,” Gordon said. “Our culture is to raise money through donor intent.”

Eichten acknowledges the philosophical split but hopes to bridge it through consultations with AFP execs and others.

For one thing, AFP’s code does approve of paying bonuses (as opposed to commissions). He envisions drafting a set of guidelines for stations to consider that are based on AFP’s ethical code.

Comments, questions, tips? karen@current.org
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